PRNewswire
NEW YORK
NEW YORK, Aug. 6 /PRNewswire/ --
Second Quarter Summary:
- Net Revenue of $592 million and EBITDA of $183 million.
- Adjusted Net Revenue of $593 million and Adjusted EBITDA of $179 million, representing a (16)% and (12)% decrease as compared to the second quarter of 2008, respectively.
- Generated $134 million in Cash from Operations in the six months ended June 30, 2009.
- From January 2008 through July 2009, Travelport Limited and its parent companies repurchased, in the aggregate, over $1.0 billion of debt at a discount in the respective amounts set forth below:
- Travelport Limited repurchased over $190 million of Travelport Limited and its subsidiaries' debt at a discount.
- Travelport Holdings Limited and Travelport Worldwide Limited, Travelport Limited's parent companies, repurchased over $835 million of Travelport Holdings Limited debt at a discount, funded primarily by distributions from Travelport Limited.
Travelport Limited, the parent company of the Travelport group of companies, today announced its financial results for the second quarter ended June 30, 2009. Travelport recognized Net Revenue of $592 million and Adjusted Net Revenue of $593 million for the second quarter of 2009, representing a (16)% decrease in Adjusted Net Revenue as compared to the same period last year. Travelport achieved EBITDA of $183 million and Adjusted EBITDA of $179 million in the second quarter of 2009, representing a decrease of (12)% in Adjusted EBITDA as compared to the same period last year.
(Logo: http://www.newscom.com/cgi-bin/prnh/20061023/NYM260LOGO )
Travelport Consolidated
($ in millions)
2Q 2009 2Q 2008 Change* % Change*
------- ------- ------- ---------
Net Revenue $592 $703 $(111) (16)%
Adjusted Net Revenue $593 $704 $(111) (16)%
EBITDA $183 $187 $(4) (2)%
Adjusted EBITDA $179 $203 $(24) (12)%
Adjusted EBITDA Margin % 30.2% 28.8% 135 bps 5%
-------------------------
* May not calculate due to rounding
Travelport CEO and President, Jeff Clarke, stated: "Low travel volumes continue to weigh negatively upon our earnings as a result of the global recessionary environment. Despite the difficult environment, Travelport continues to aggressively invest in the next generation of our products and expansion into new markets. Furthermore, we are pleased with our and our parent companies' repurchases of debt at a discount since January 2008, which has resulted in over a $1 billion reduction in debt at Travelport Limited and its parent companies combined. Travelport's financial condition remains strong, which enables us to continue to better position and invest in the company for the future."
Mike Rescoe, Travelport CFO, stated: "We continue to optimize our cost structure and, as of the end of the second quarter, we completed actions that achieved Worldspan synergy savings in excess of $165 million. Furthermore, we continue to optimize our capital structure with an additional $10 million of our debt retired at a discount in the second quarter and our parent company's retirement of over $250 million of debt at a discount, a transaction that settled in early July 2009. Since January 2008, we have repurchased over $190 million of our debt at a discount, and Travelport Holdings Limited and Travelport Worldwide Limited, our parent companies, have repurchased approximately $835 million of Travelport Holdings Limited debt at a discount, funded primarily by distributions from us. In addition, in the second quarter, we repaid $263 million in borrowings under our revolving credit facility and once again have the entire $270 million of liquidity available. Despite the tight credit environment, we believe our access to the capital markets remains strong as evidenced by our ability to borrow an additional $150 million in term loans in a transaction that was oversubscribed during the quarter. For the six months ended June 30, 2009, Travelport generated $134 million in cash from operations and ended the period with $283 million in cash and cash equivalents."
Financial Highlights Second Quarter 2009
GDS
($ in millions)
2Q 2009 2Q 2008 Change* % Change*
------- ------- ------- ---------
Net Revenue $515 $592 $(77) (13)%
Adjusted Net Revenue $516 $593 $(77) (13)%
EBITDA $167 $161 $6 4%
Adjusted EBITDA $173 $184 $(11) (6)%
Adjusted EBITDA Margin % 33.5% 31.0% 250 bps 8%
-------------------------
* May not calculate due to rounding
Net Revenue and EBITDA for our GDS business were $515 million and $167 million, respectively, for the second quarter of 2009. Adjusted Net Revenue and Adjusted EBITDA for our GDS business were $516 million and $173 million, respectively, for the second quarter of 2009. This resulted in a (13)% reduction in Adjusted Net Revenue and a (6)% reduction in Adjusted EBITDA as compared to the second quarter of 2008. Lower revenue resulted from a (15)% decline in segments, offset by higher yield per segment compared to the second quarter of 2008. Operating expenses, excluding agency inducements and commissions, reduced by $(27) million, or (16)%, compared to the second quarter of 2008, which included $(10) million of favorable currency changes and an $(8) million recovery on a disputed commercial agreement.
GTA
($ in millions)
2Q 2009 2Q 2008 Change* % Change*
------- ------- ------- ---------
Net Revenue $77 $111 $(34) (31)%
Adjusted Net Revenue $77 $111 $(34) (31)%
EBITDA $21 $36 $(15) (42)%
Adjusted EBITDA $22 $36 $(14) (39)%
Adjusted EBITDA Margin % 28.6% 32.4% (386) bps (12)%
-------------------------
* May not calculate due to rounding
Net Revenue and EBITDA for GTA were $77 million and $21 million, respectively, for the second quarter of 2009. Adjusted Net Revenue and Adjusted EBITDA for GTA for the second quarter of 2009 were $77 million and $22 million, respectively, representing a $(34) million decline in Adjusted Revenue and a $(14) million decrease in Adjusted EBITDA compared to the second quarter of 2008. Global Total Transaction Value ("TTV") declined (26)% in the quarter, driven by (16)% fewer room nights and unfavorable currency changes. Operating expenses for GTA decreased $(13) million, or (21)%, during the second quarter of 2009 driven by cost reductions and favorable currency changes, offset by a $4 million increase in bad debts.
Corporate and Other
Travelport incurred Adjusted Corporate and Other expenses of $16 million for the second quarter of 2009, representing a $(1) million decrease compared to the second quarter of 2008. Net Interest Expense was $72 million in the quarter, a $20 million increase from the second quarter of 2008, due to $25 million in non-cash mark-to-market changes between the second quarter of 2009 and 2008 on our interest rate derivatives. Excluding the impact of the non-cash activities, net interest expense decreased by $(5) million as compared to the second quarter of 2008.
During the first half of 2009, Travelport generated $134 million in cash from operations, a $(19) million decrease from the same period in 2008, and used $(19) million in cash to fund capital investments. In addition, Travelport borrowed $150 million in additional term loans during the period while repaying the entire amount outstanding under its revolving credit facility. The Company ended June with $283 million in cash and cash equivalents. Subsequent to the end of the first half, Travelport distributed $152 million to its parent company to fund the repurchase of a portion of its outstanding PIK loans at a discount.
Orbitz Worldwide
Travelport Limited currently owns approximately 48% of the outstanding equity of Orbitz Worldwide. Travelport accounts for its investment in Orbitz Worldwide under the equity method of accounting. During the second quarter of 2009, Travelport recorded $5 million in income from its investment in Orbitz Worldwide, an $8 million improvement from the prior year.
Conference Call/Webcast
The Company's second quarter 2009 earnings conference call will be accessible to the media and general public via live Internet Webcast today beginning at 11:00 a.m. (ET), and through a limited number of listen-only, dial-in conference lines. The Webcast will be available through the Investor Center section of the Company's Web site at www.travelport.com. To access the call through a conference line, dial 888-713-4218 in the United States and 617-213-4870 for international callers beginning at least 10 minutes prior to the scheduled start of the call. The passcode is 94677028. A replay of the conference call will be available August 6, 2009 at 2:00 p.m. (ET) through August 13, 2009. To access the replay, dial 888-286-8010 in the United States and 617-801-6888 for international callers. The passcode is 63066452.
About Travelport
Travelport is one of the world's largest travel conglomerates offering broad based business services to companies operating in the global travel industry. Travelport is comprised of the global distribution system (GDS) business that includes the Worldspan and Galileo brands; GTA, a leading global, multi-channel provider of hotel and ground services; IT Services and Software, which hosts mission critical applications and provides business and data analysis solutions for major airlines. With 2008 revenues of $2.5 billion, Travelport operates in 160 countries and has over 5,500 employees. Travelport also owns approximately 48% of Orbitz Worldwide (NYSE: OWW), a leading global online travel company. Travelport is a private company owned by The Blackstone Group, One Equity Partners, Technology Crossover Ventures and Travelport management.
Forward-Looking Statements
Certain statements in this press release constitute "forward-looking statements" that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "projects", "estimates", "plans", "may increase", "may fluctuate" and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements.
Various risks that could cause future results to differ from those expressed by the forward-looking statements included in this press release include, but are not limited to: our ability to service our outstanding indebtedness and the impact such indebtedness may have on the way we operate our business; factors affecting the level of travel activity, particularly air travel volume, including security concerns, natural disasters, health concerns such as the swine flu and other diseases, the current crisis in the global credit and financial markets and other disruptions; general economic and business conditions in the markets in which we operate, including fluctuations in currencies; pricing, regulatory and other trends in the travel industry; our ability to obtain travel supplier inventory from travel suppliers, such as airlines, hotels, car rental companies, cruise lines and other travel suppliers; our ability to develop and deliver products and services that are valuable to travel agencies and travel suppliers; risks associated with doing business in multiple countries and in multiple currencies; maintenance and protection of our information technology and intellectual property; our ability to successfully integrate acquired businesses and realize anticipated benefits of past and future acquisitions, including the Worldspan acquisition; the impact on supplier capacity and inventory resulting from consolidation of the airline industry; financing plans and access to adequate capital on favorable terms; our ability to achieve expected cost savings and operational synergies from our re-engineering efforts and the Worldspan acquisition; our ability to maintain existing relationships with travel agencies and tour operators and to enter into new relationships; and our exposure to customer credit risk. Other unknown or unpredictable factors also could have material adverse effects on our performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release. Except to the extent required by applicable securities laws, the Company undertakes no obligation to release any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless required by law.
This release includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, important information regarding such measures is contained below.
INVESTOR CONTACT: Tony Basoukeas of Travelport, +44 17 5328 8475, or tony.basoukeas@travelport.com.
TRAVELPORT LIMITED
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In $ millions and unaudited)
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June June June June
30, 30, 30, 30,
2009 2008 2009 2008
---- ---- ------ ------
Net revenue $592 $703 $1,145 $1,369
---- ---- ------ ------
Costs and expenses
Cost of revenue 286 362 564 702
Selling, general and
administrative 127 153 277 336
Restructuring charges 7 5 13 14
Depreciation and amortization 62 62 124 129
Other (income) expense (5) 5 (5) 5
--- - --- -
Total costs and expenses, net 477 587 973 1,186
--- --- --- -----
Operating income 115 116 172 183
Interest expense, net (72) (52) (138) (138)
Gain on early extinguishment
of debt 6 9 6 18
- - - --
Income from operations before
income taxes and equity in
earnings (losses) of
investment in Orbitz Worldwide 49 73 40 63
Provision for income taxes (14) (11) (14) (23)
Equity in earnings (losses)
of investment in Orbitz Worldwide 5 (3) (156) (10)
- --- ----- ----
Net income (loss) 40 59 (130) 30
Less: Net income attributable
to non-controlling interest
in subsidiaries (1) - (2) -
--- --- --- ---
Net income (loss) attributable
to the Company $39 $59 $(132) $30
=== === ====== ===
TRAVELPORT LIMITED
SEGMENT EBITDA AND RECONCILIATION OF EBITDA
(In $ millions and unaudited)
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June June June June
30, 30, 30, 30,
2009 2008 2009 2008
---- ---- ---- ----
GDS
Net revenue $515 $592 $1,026 $1,184
Segment EBITDA (b) 167 161 319 325
GTA
Net revenue 77 111 119 185
Segment EBITDA 21 36 10 45
Corporate and other
EBITDA (a)(b) (5) (10) (27) (40)
Consolidated Totals
Net revenue $592 $703 $1,145 $1,369
EBITDA $183 $187 $302 $330
-------------------------
(a) Corporate and other includes corporate general and administrative
costs not allocated to the segments.
(b) As of January 1, 2009 certain operations were transferred from
Corporate and other to the GDS segment. The costs associated with
these operations in 2008 have been adjusted from Corporate and
other to the GDS segment for consistency with the current year
presentation.
Provided below is a reconciliation of EBITDA to income from
operations before income taxes and equity in earnings (losses) of
investment in Orbitz Worldwide:
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June June June June
30, 30, 30, 30,
2009 2008 2009 2008
---- ---- ---- ----
EBITDA $183 $187 $302 $330
Interest expense, net (72) (52) (138) (138)
Depreciation and
amortization (62) (62) (124) (129)
---- ---- ----- -----
Income from
operations before
income taxes and
equity in earnings
(losses) of
investment in
Orbitz Worldwide $49 $73 $40 $63
=== === === ===
Adjusted Revenue, EBITDA, and Adjusted EBITDA are non-GAAP measures and may not be comparable to similarly named measures used by other companies. We believe that these measures provide management with a more complete understanding of the underlying operating results and trends and an enhanced overall understanding of the Company's financial performance and prospects for the future. Adjusted Revenue, EBITDA and Adjusted EBITDA are not intended to be measures of liquidity or cash flows from operations nor measures comparable to net income as they do not take into account certain requirements such as capital expenditures and related depreciation, principal and interest payments and tax payments. However, they are management's primary metric for measuring business performance and are used by the Board of Directors to determine incentive compensation. Capital expenditures, which impact depreciation and amortization, interest expense and income tax expense, are reviewed separately by management. Adjusted Revenue, EBITDA and Adjusted EBITDA are disclosed so that investors may have the same tools available to management when evaluating the results of Travelport. Adjusted Revenue is defined as Revenue adjusted to include the impact of deferred revenue previously written off due to purchase accounting on the acquisition of Travelport by an affiliate of The Blackstone Group. EBITDA is defined as income from operations before income taxes and equity in earnings (losses) of investment in Orbitz Worldwide, depreciation and amortization and interest expense, net. Adjusted EBITDA is defined as EBITDA adjusted to exclude the aforementioned impact of purchase accounting, impairment of intangibles assets, expenses incurred in conjunction with Travelport's separation from Cendant, expenses incurred to acquire and integrate Travelport's portfolio of businesses, costs associated with Travelport's restructuring efforts and development of a global on-line travel platform, non-cash equity-based compensation, and other adjustments made to exclude expenses management views as outside the normal course of operations.
TRAVELPORT LIMITED
RECONCILIATION OF NET REVENUE AND EBITDA TO ADJUSTED NET REVENUE AND
ADJUSTED EBITDA
(In $ millions and unaudited)
Three Months Ended June 30, 2009
--------------------------------
Corporate
GDS GTA & Other Total*
--- --- --------- ------
Net Revenue $515 $77 $0 $592
Adjustments
Separation from
Cendant and Related 1 - - 1
- - - -
Total 1 - - 1
- - - -
Adjusted Net Revenue* $516 $77 $0 $593
---- --- -- ----
EBITDA $167 $21 $(5) $183
Adjustments - - - -
Impairment - - - -
Separation from
Cendant and Related (1) - 2 1
Non-recurring Items
Associated with
Travelport
Acquisitions 7 (1) 5 11
Restructure and Related - 3 1 3
Non-cash based
compensation - - 3 3
Other - 0 (22) (21)
- - --- ---
Total 7 2 (12) (4)
- - --- --
Adjusted EBITDA* $173 $22 $(16) $179
---- --- ---- ----
Three Months Ended June 30, 2008
--------------------------------
Corporate
GDS GTA & Other Total*
--- --- --------- ------
Net Revenue $592 $111 $0 $703
Adjustments
Separation from
Cendant and Related 0 - - 0
- - - -
Total 0 - - 0
- - - -
Adjusted Net Revenue* $593 $111 $0 $704
EBITDA $161 $36 $(10) $187
Adjustments
Impairment - - 0 0
Acquired / Disposed
EBITDA 5 - - 5
Separation from
Cendant and Related 0 - 2 2
Non-recurring Items
Associated with
Travelport
Acquisitions 18 (1) 3 20
Restructure and Related 0 1 1 2
Non-cash based
compensation - - - -
Other - - (13) (13)
- - --- ---
Total 24 (0) (7) 16
-- -- -- --
Adjusted EBITDA* $184 $36 $(17) $203
---- --- ---- ----
-------------------------
* Totals may not calculate due to rounding.
- Not meaningful.
TRAVELPORT LIMITED
RECONCILIATION OF NET REVENUE AND EBITDA TO ADJUSTED NET REVENUE
AND ADJUSTED EBITDA
(In $ millions and unaudited)
Six Months Ended June 30, 2009
------------------------------
Corporate
GDS GTA & Other Total*
--- --- --------- ------
Net Revenue $1,026 $119 $0 $1,145
Adjustments
Separation from
Cendant and Related 2 - - 2
- - - -
Total 2 - - 2
- - - -
Adjusted Net Revenue* $1,028 $119 $0 $1,146
------ ---- -- ------
EBITDA $319 $10 $(27) $302
Adjustments - - - -
Impairment 1 - - 1
Separation from
Cendant and Related - - 5 5
Non-recurring Items
Associated with
Travelport Acquisitions 14 (2) 9 21
Restructure and Related 0 4 1 6
Non-cash based
compensation - - 3 3
Other - 0 (22) (22)
- - --- ---
Total 15 3 (4) 14
-- - -- --
Adjusted EBITDA* $334 $12 $(31) $315
---- --- ---- ----
Six Months Ended June 30, 2008
------------------------------
Corporate
GDS GTA & Other Total*
--- --- --------- ------
Net Revenue $1,184 $185 $0 $1,369
Adjustments
Separation from Cendant 1 - - 1
- - - -
Total 1 - - 1
- - - -
Adjusted Net Revenue* $1,185 $185 $0 $1,370
EBITDA $325 $45 $(40) $330
Adjustments
Impairment - - 0 0
Acquired / Disposed
EBITDA 7 - - 7
Separation from
Cendant and Related 1 (0) 3 4
Non-recurring Items
Associated with
Travelport
Acquisitions 39 (2) 15 51
Restructure and Related (0) 2 2 4
Non-cash based
compensation - - - -
Other - - (20) (20)
- - --- ---
Total 47 (1) - 46
-- -- - --
Adjusted EBITDA* $371 $44 $(40) $375
---- --- ---- ----
-------------------------
* Totals may not calculate due to rounding.
- Not meaningful.
TRAVELPORT LIMITED
CONSOLIDATED CONDENSED BALANCE SHEETS
(In $ millions and unaudited)
June December
30, 31,
2009 2008
---- ----
Assets
Current assets:
Cash and cash equivalents $283 $345
Accounts receivable, net 400 372
Deferred income taxes 7 7
Other current assets 219 201
--- ---
Total current assets 909 925
Property and equipment, net 472 491
Goodwill 1,752 1,738
Trademarks and tradenames 500 499
Other intangible assets, net 1,485 1,552
Investment in Orbitz Worldwide 58 214
Other non-current assets 174 151
--- ---
Total assets $5,350 $5,570
====== ======
Liabilities and equity
Current liabilities:
Accounts payable $145 $140
Accrued expenses and other
current liabilities 805 764
Current portion of long-term
debt 27 19
-- --
Total current liabilities 977 923
Long-term debt 3,647 3,783
Deferred income taxes 234 238
Other non-current liabilities 208 207
--- ---
Total liabilities 5,066 5,151
----- -----
Commitments and contingencies
Shareholders' equity:
Common shares $1.00 par value;
12,000 shares authorized;
12,000 shares issued and
outstanding - -
Additional paid in capital 1,188 1,225
Accumulated deficit (904) (773)
Accumulated other comprehensive
loss (16) (40)
---- ----
Total shareholders' equity 268 412
Equity attributable to
non-controlling interest in
subsidiaries 16 7
-- -
Total equity 284 419
--- ---
Total liabilities and equity $5,350 $5,570
====== ======
TRAVELPORT LIMITED
STATEMENTS OF CASH FLOWS
(In $ millions and unaudited)
Six Six
Months Months
Ended Ended
June June
30, 30,
2009 2008
---- ----
Operating activities
Net income (loss) attributable
to the Company $(132) $30
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Depreciation and amortization 124 129
(Gain) loss on sale of assets (5) 5
Provision for bad debts 10 7
Equity based compensation 3 -
Gain on early extinguishment of
debt (6) (18)
Amortization of debt finance
costs 8 11
Gain on interest rate derivative
instruments (3) (23)
Gain on foreign exchange
derivative instruments (16) (5)
Equity in losses of investment
in Orbitz Worldwide 156 10
Non-controlling interest in
subsidiaries 2 -
FASA liability (17) (17)
Deferred income taxes (5) (6)
Changes in assets and
liabilities, net of effects
from acquisitions and disposals
Accounts receivable (33) (78)
Other current assets 4 (6)
Accounts payable, accrued
expenses and other current
liabilities 54 129
Other (10) (15)
---- ----
Net cash provided by operating
activities 134 153
--- ---
Investing activities
Property and equipment additions (19) (46)
Proceeds from sale of assets 5 -
Acquisition related payments and
other (1) (2)
--- ---
Net cash used in investing
activities (15) (48)
---- ----
Financing activities
Principal repayments (277) (109)
Proceeds from new borrowings 144 -
Debt finance costs (3) -
Net share settlement for
equity-based compensation (7) -
Distribution to a parent company (42) -
---- -
Net cash used in financing
activities (185) (109)
----- -----
Effect of changes in exchange
rates on cash and cash
equivalents 4 4
- -
Net decrease in cash and cash
equivalents (62) -
Cash and cash equivalents at
beginning of period 345 309
--- ---
Cash and cash equivalents at end
of period $283 $309
==== ====
Supplemental disclosure of cash
flow information
$131 $154
Interest payments
Income tax payments, net $17 $18
TRAVELPORT LIMITED
Operating Statistics
(Unaudited)
Three Months Ended
June 30th
-------------------
2009 2008 Change % Change
---- ----
GDS (segments in millions)
Americas Segments 43.5 49.1 (6) (11)%
International Segments 42.5 52.3 (10) (19)%
---- ----
Total Segments 86.0 101.4 (15) (15)%
GTA (TTV in millions)
Total Transaction Value $406 $551 ($144) (26)%
SOURCE Travelport Limited
Photo: http://www.newscom.com/cgi-bin/prnh/20061023/NYM260LOGO
SOURCE: Travelport Limited
Web site: http://travelport.com//